Monday, November 9, 2009

The invisible strangling hand of the market.

It seems that the Ayn Rand scholars may have some rethinking to do. Story here New Zild has a supermarket market that is a duopoly and thus prices are not in competition with each other thus we pay more for groceries than everybody else outside of the International Space Station.
An associate professor from the university's School of Business, Frank Zumbo, says Australia and New Zealand both have supermarket duopolies that act as "cosy clubs" and that's the reason for the high prices.
Professor Zumbo told Checkpoint it's a fundamental economic principle that more independent competition leads to lower food prices.

Firstly Prof. Zumbo is the best sounding name of an academic this year, no question. Then he points out what has happened, the market was a glorious free-for-all and prices were cut to gain market share. For a while. Then two players took over and now...supermarkets sell watercrackers singly.
But this is not what we are told; Companies will prosper and expand whilst the market is there for us to benefit from, they won't merge, become huge and pretend that they are still a free market. That would defy the teachings of Chicagoans and Randians.
And that would be just awful!

7 comments:

Jennifer said...

This Chicagoan just added you to her blogroll.

ifthethunderdontgetya™³²®© said...

Ditto what Jennifer said (about the blogroll, not teh spiders).
~

Another Kiwi said...

Please forgive the Chicagoan reference, it should say the Chicagoan economists. Sorry Jennifer.

ifthethunderdontgetya™³²®© said...

We have pre-Columbian economics here.

Speaking of witch: I'm thinking of finally moving beyond Windows ME (renowned as it is):

DELL LATITUDE D630 2400MHz 2048MB 80GB (WIN XPP) 14.1 DVDRW 10/100 NIC 56 kbps 8 MB VRAM

Current Bid:
396.00

Seems pretty cheep (it's at Dell Auctions).
~

M. Bouffant said...

We have effectively two super-market chains in what we amusingly refer to as "The Southland," & they have both lowered many prices recently, but that's because no one has any spare food money anymore.

Jennifer said...

Please forgive the Chicagoan reference, it should say the Chicagoan economists. Sorry Jennifer.

No need to apologize. I have no illusions.

Thunder! Keep your damn spiders references out of here!

Another Kiwi said...

The thing about here is that we only have 4 million people so a big player can dominate relatively quickly. So all of the stuff about the "level playing field" and "market Forces" kind of hits a brick wall rather quickly.